Quotes of the Day

Nick White is the only executive who dares say out loud what the whole wireless industry is thinking: "Sex represents a big revenue opportunity. We would be naive to ignore it." White heads the "value-added services" team at Virgin Mobile, and one of his tasks is to develop new offerings that exploit the profit potential of upcoming features of wireless networks and devices — more bandwidth, larger color screens, better audio capabilities and zippier microchips that can run video clips.

Every mobile operator is looking at fresh ways to sell more phones and generate badly needed revenue. The one service that everyone is ogling is pornography, uh, I mean "adult entertainment," or "pink content," as it is also called. While everybody is working on it — designing strategies and signing agreements with the likes of Playboy Enterprises and Private Media Group, two of the largest companies in the pornography-publishing business — for now, only the brave will actually admit it.

"Porn is an embarrassment for the mobile industry," says Alan Reiter, president of Maryland-based consultancy, Wireless Internet and Mobile Computing. Operators are hesitant to tie their names too closely to it, for moral or legal reasons, or just because it might tar the brand. But the potential is too big to ignore. If third-generation (3G) phones take off the way operators expect, then porn could represent as much as j3.7 billion in revenues by 2006, according to British research firm Visiongain.

Like it or not, historically pornography has provided the unsung accelerator for every major new communication technology, from Polaroid to VCRs and cable television to Minitel (the early French online service) and the Internet. "Consumers of porn have accelerated the diffusion of new technologies by becoming early buyers and users," says Jonathan Coopersmith, an associate professor of history at Texas A&M University. In the late 1970s, for example, X-rated tapes constituted over half of all sales of prerecorded videos, and in the mid-1980s messageries roses (literally, "pink messaging") accounted for one-third to one-half of all traffic on Minitel. More recently, pornography has been the only consistent Internet moneymaker. The reason: technology helps overcome the porn industry's biggest foe — the "shame factor" — by providing more privacy. Consumers become early adopters, helping to establish markets and build familiarity with new technologies. And when the tech goes mainstream, porn's relative share drops.

Skeptics argue that porn is unlikely to play a similar role for wireless devices because of their small screens. Yet sexual content is already widely available in the wireless world. Even using relatively clunky technology like short messaging services (SMS) and multimedia messaging (mms), users can sample such sensual delights as the "position of the week" (complete with the level of difficulty), "orgasmic" ringtones and explicit pictures. Some analysts even suggest that the future of 3G wireless telephony depends on porn — it's one of the few services people are prepared to pay for, and its availability could spur the purchase of new cell phones. "Nobody is going to buy a new handset just to make a phone call," says Petri Mähönen, a professor of wireless systems at the Technical University in Aachen, Germany. While the industry hypes directions to restaurants or football clips, he argues, "the big things will be sex and games."

Mobile operators are, of course, "very unlikely to get directly involved in producing or editing porn," notes Bruno Duarte, head of the telecom practice at consultancy Arthur D. Little in Paris. Virgin Mobile's White says his firm's "pink content" will be "very soft, more middle shelf than top shelf," while other services will be provided by partners. Hard core offerings, White says, will be provided through "third-party services" that operators will carry, and for which they will set up billing mechanisms — and take a chunk of the revenue, potentially several euros per month per user.

Whether this will insulate mobile service providers against any potential liabilities — in the case of transmitting child pornography, for example — remains to be seen. Virgin is working with other operators to establish a code of practice. But cell phones, like personal computers, are increasingly being used by children and teenagers, so creating ways of limiting access is one of the tough tasks ahead. "By next year we will have a discussion about wireless-content filtering and responsibility of the carriers very similar to what we had for the Internet," says Mähönen.

• BRUNO GIUSSANI
• Will Wi-Fi get the boost from pornography that kick started the World Wide Web